Real Time Disclosures

Under Section 409 of the Sarbanes-Oxley Act, the SEC was authorized but not required to compel companies to make public disclosures on a “rapid and current basis” of additional financial information (i.e., information concerning material changes in financial condition or operations.) The authority is in addition to the authority the SEC already has to require current reporting on Form 8-K for U.S. companies and on Fork 6-K for non-U.S. companies.

The SEC adopted final rules to accelerate the filing of periodic reports. Additionally, they require those companies to provide additional disclosure about the availability of their periodic and current reports on their Web sites.

The new rules shortened the deadline for filing annual reports and quarterly reports for those public companies that are defined as “accelerated files.” The new deadlines were phased in over a three year period. For fiscal years ending on or after December 31, 2004, the deadlines will be 60 days for annual reports on Form 10-K and 40 days for quarterly reports on form 10-Q. Beginning with fiscal years beginning on or after December 15, 2005, the deadline for the Form 10-Q will be shortened to 35 days.

The rules require accelerated filers to provide disclosures in their annual reports on Form 10-K regarding availability on their Web sites on their periodic and current reports filed with the SEC. An accelerated filer that does not make its report available on its Web site must disclose the reasons for not making its reports available on its Web site and whether it will voluntarily provide electronic or paper copies of such filings free of charge upon request.

- Earl R. Thomas
Earl R. Thomas & Associates